Business loan effort launching

Wednesday

Apr 30, 2014 at 2:00 AM

A new $1 million revolving loan program will soon be offered to small and medium-sized businesses in York County, or for entrepreneurs just starting out. The Southern Maine Planning and Development Commission is teaming up with the Biddeford-Saco Economic Development Corporation to offer the loans.

Deborah mcDermott

A new $1 million revolving loan program will soon be offered to small and medium-sized businesses in York County, or for entrepreneurs just starting out. The Southern Maine Planning and Development Commission is teaming up with the Biddeford-Saco Economic Development Corporation to offer the loans.

The Maine congressional delegation this week lauded the award of $500,000 from the Economic Development Administration, which will be matched by the BSEDC.

"It's really big for us," said SMPDC director Paul Schumacher. "This sort of thing has been listed as a need going back 10 to 15 years. We're trying to get greater coverage of capital out there to parts of York County that have had access to it."

According to Schumacher, the loans are geared toward businesses with five to 50 employees. They are not intended as primary loans, but rather as supplementary funding. The anticipation is that loan amounts would vary from $50,000 to $200,000, enough to expand a business or make equipment purchases. He anticipates interest rates will be at market levels.

"Often what we hear is that banks can only do so much, and more financing is needed," he said. "This program now gives businesses another means by which to secure additional funding."

Moreover, he said, now that the SMPCD has received one grant from the federal government, "there is the potential to open this up so that we can apply to different loan funds. It sort of puts us on the path."

He said because it is a revolving loan fund, as the loans are repaid the principal will grow, thus allowing the commission to make even more loans.

Schumacher anticipates a rollout of the program sometime in June.

Sens. Susan Collins and Angus King and U.S. Reps. Chellie Pingree and Mike Michaud released a joint statement this week lauding the news, saying they were pleased to learn of the federal grant.

"This welcomed award will boost SMPDC's already exceptional work and help buoy local businesses, support economic innovation, and create good-paying jobs for people throughout southern Maine," King said.

"This is a smart investment in the local economy that is going to help create jobs and help workers who have been laid off transition to a new career," Pingree said. "It's good for southern Maine and the families that live and work there."

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